We report phase-referencing VLBA observations of H2O masers near the star-forming region W3(OH) to measure their parallax and absolute proper motions. The measured annual parallax is 0.489 ±0.017 mas (2.04 ±0.07 kpc), where the error is dominated by a systematic atmospheric contribution. This distance is consistent with photometric distances from previous observations and with the distance determined from CH3OH maser astrometry presented in a related paper. We also find that the source driving the H2O outflow, the 'TW-object,' moves with a three-dimensional velocity of >7 km s-1 relative to the ultracompact H II region W3(OH).